The Holidays are Upon Us and for Payroll That Could Mean Taxing Gifts

‘Tis the season for celebrating.  Office holiday parties, year end bonuses and most of all gifts from the company.  Maybe a $25 gift card to help with the holiday dinner or a nice ham or turkey.  The idea of getting something from the boss is a joyous and wonderful idea for most American workers.  But to payroll, the giving of gifts to employees means only one thing, the annual argument over taxation!

The Internal Revenue Code (IRC) requires that any payment made to an employee that is cash or the cash equivalent is taxable wages to the employee.  As stated on the IRS website “Cash or cash equivalent items provided by the employer are never excludable from income… Gift certificates that are redeemable for general merchandise or have a cash equivalent value are not de minimis benefits and are taxable.”

Unfortunately payroll gets to play “The Grinch” when it comes to taxing gift certificates.  But what about an actual ham or turkey or other such item?  Do we have to tax that as well?  On that one we get to play Santa!  No taxation is required on holiday gifts with a low fair market value such as a ham or turkey.

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AZ Updates Code Conformity

Arizona has updated it conformity to the Internal Revenue Code.  The new conformity date is January 1, 2015.

OH Updates Code Conformity

Ohio Gov. John Kasich has signed legislation (H.B. 19) that updates the federal conformity date to bring Ohio tax law into alignment with changes to the Internal Revenue Code (Code) taking effect after March 22, 2013 (formerly set at December 20, 2012).

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SC Updates Code Conformity

Recently enacted legislation, S.B. 397, updates South Carolina’s Internal Revenue Code conformity date to December 31, 2014.

AR Updates Code Conformity

Arkansas has updated its conformity to the Internal Revenue Code (Code).  The new conformity date is January 1, 2015.  The previous version date was January 2, 2013.

VA Updates Code Conformity

Virginia Governor Terry McAuliffe has signed legislation updating the state’s conformity to the Internal Revenue Code (Code) from January 2, 2013 to December 31, 2014.

GA Updates Code Conformity

Georgia has enacted legislation (H.B. 292) that updates the conformity to the Internal Revenue Code (Code) from January 1, 2014 to on or before January 1, 2015.

NE Updates Code Conformity

Nebraska has updated its conformity to the Internal Revenue Code (Code). Any references to the Code refers to the Code as it exists on February 26, 2015.  The former date was April 11, 2014.

WV Updates Code Conformity

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